- Coinbase’s chief lawyer testified about regulatory barriers between banks and crypto firms at a House Financial Services Committee hearing.
- FDIC faced criticism from a federal judge for resisting document requests, leading to accelerated disclosure requirements.
- Republican lawmakers supported claims of regulatory overreach, while Democrats defended cautionary approach to crypto-banking relationships.
- New FDIC Acting Chairman ordered review of supervisory communications about crypto following legal pressure.
- Federal Reserve document revealed potential evidence of systematic efforts to separate banks from crypto businesses.
A contentious battle over crypto industry access to banking services intensified as Coinbase Chief Legal Officer Paul Grewal presented evidence of regulatory obstruction to the House Financial Services Committee on Thursday, highlighting what industry participants call systematic efforts to separate digital asset companies from traditional banking services.
The testimony revealed a pattern of what Grewal termed “regulation by exhaustion,” where regulators publicly maintained neutrality while privately directing banks to distance themselves from crypto businesses. This practice, nicknamed “Operation Chokepoint 2.0” by industry observers, drew sharp criticism from Republican committee members.
U.S. District Court Judge Ana Reyes expressed frustration with the FDIC’s handling of document requests, demanding accelerated disclosure and threatening sanctions over potential document destruction. The judge’s stern stance prompted newly appointed Acting Chairman Travis Hill to order a comprehensive review of the agency’s crypto-related communications with banks.
Senator Cynthia Lummis unveiled an internal Federal Reserve document that she claimed provided concrete evidence of regulatory pressure on banks. The document suggested increased scrutiny for banks engaging with crypto-related activities.
Democrat Representative Al Green defended regulatory caution, stating that “asking banks to consider the risk associated with the cryptocurrency industry does not amount to debanking.” This position highlights the partisan divide in approaches to crypto regulation.
Coinbase’s legal team achieved a significant victory when the FDIC released additional documents before the court’s deadline. Paul Grewal acknowledged this progress on social media while indicating that further disclosure would be necessary for full transparency.
The congressional examination of crypto banking relationships continues next week with a hearing titled “A Golden Age of Digital Assets: Charting a Path Forward,” suggesting potential shifts in regulatory landscape under evolving political dynamics.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- AI Token Market Plunges: Leading Projects See Up to 90% Drop from 2024 Peak
- Trump’s Truth Platform Unveils Six New Financial Products Including ETFs and SMAs
- Tron’s Justin Sun Sues David Geffen Over $78M Giacometti Sculpture Dispute
- Crypto Market Bleeds: XRP, Dogecoin, and Cardano Each Plunge 26% in Week-Long Slump
- Trump-Backed DeFi Platform Increases Stake in Ondo Finance with $470K Token Purchase
